SECTION F 3 LOCAL ECONOMIC DEVELOPMENT [LED]
The primary role of the Kouga Municipality in local economic development is to coordinate, facilitate and stimulate sustainable
economic development within its jurisdiction through appropriate mechanisms; Strategy and policy development; Programme
development and co-ordination and Strategic liaison and networking
The Municipality is has established in May 2011 established a standalone LED, Tourism & Creative Industry Directorate. The
Directorate is manned by a Section 57 Manager (vacant and to be filled by June 2012), Manager LED and Manager Tourism and
Creative Industries with supporting staff and each with its Portfolio Head Councillor. Other vacancies as the Trade and
Investment officer and movement of staff from other departments to creative industries will be considered during the
reorganizational programme set to be complete by June 2012. The Municipality is in possession of LED Plan, SMME strategy and
Integrated Tourism Sector Plan which were adopted in June 2010, December 2008 and July 2009 respectively. In all these plans
and strategies gaps still exist and the new council need to review. Currently there is misalignment between LED & MIG, portion
of LED funding is with MIG and is not allocated as such. The municipality has proactively prioritized LED projects and 10%-15%
should benefit SMME & EPWP. R 700 000.00 has been received from EPWP. Alignment of SMME‟s skills development with
Municipal data base is a strategy to assist the local SMME‟s. The criteria is envisaged to be developed to accommodate the local
companies (SMME‟s) and Supply chain policy will be reviewed to and incorporate the BBE Act mandate. ISD need to be
employed to make sure that all trained SMMEs benefit in the MIG projects The municipality has strong partnerships with SEDA,
and SEDA is assisting with capacity building and registration.. No support given by the DLGTA or DEDEA in terms of IGR. No
LED forum available but need to be revived. DLGTA (LED) to assist with the revival of the Forum. The plan to include Sport &
Recreational Facilities has been developed and it has been included in the MTEF for 2012/13.
1.
LED Objectives
The Kouga vision outlines key principles and outcomes to address the key development challenges in the area. To fulfil
this vision the IDP defines a set of objectives and strategies in a number of priority areas including economic
development. These are clustered under three key objectives identified for local economic development.
Kouga seeks to increase employment and stimulate economic growth through the Economic Development &
Empowerment Strategies by:

Promotion and development of Small, Medium and Micro Enterprises. (SMME‟s) with focus on PDI‟s

Regulations, by-laws and Council policies should promote and encourage business investment and local labour incentives

Effective utilisation of Council‟s assets, land and buildings to stimulate entrepreneurship and creating SMME incubators

Promote and stimulate the opportunities for Public \ Private Partnerships (PPP‟s) for infrastructure and service delivery.

Stimulate economic growth and business development through incentives for business retention, expansion and
attraction

Encourage human resource development through existing and future projects and community organisations

Promote and market the local area through tourism organisations, customer services and establishment of ongoing
linkages with other regional economic development)

Promote and support local business support and spending

Promote beneficiation of local products and raw materials

Participate in national programmes – ensure that the community is exposed to all initiatives and
encourage them to
participate. Assist communities with access to programmes and funds
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
Increase knowledge and awareness of the need to stimulate economic growth throughout the
Kouga region by
training and capacity building

Co-ordinate employment initiatives through Expanded Public Works Programme and Supply chain processes

Strive to access all forms of funding and support
To improve the tourism industry and increase number of tourists visiting the region through the following tourism
Strategies:

Upgrade, maintain and provide tourism facilities and support

Engage in active marketing on a local and regional level

General town beautification

Adequate Economic infrastructure

Develop and concentrate on key attractions and annual events

Encourage capacity building, development and training of people
The municipality has conducted a process of reviewing its Local Economic Development Strategy and participation of all
councillors, officials and the public was sought to ensure that we strategise together in order to develop our local economy.
2.
Capacity Assessment for LED Programmes
The Kouga organogram provides for a LED Unit, with key function of coordinating the development of LED policies,
strategies, plans, programmes and has established a Development Agency to facilitate the full implementation thereof.
The Manager in LED has LED requirement skills and reports to the Section 57 Manager of the LED, Tourism and
Creative Industries Directorate that has a fixed term five year contract. About 80% of the approved LED posts in the
organogram are filled. In the past 3 years 50-69% of LED staff has attended at least 3 accredited training and less than
30% of LED staff has at least 3 years of relevant working experience and policies that guide the implementation of LED
programmes. LED portfolio committee is in place chaired by the councillor who is heads the directorate, LED
stakeholders forum have been established in since 2010 and need to be revitalised.
SMME strategy has been adopted by council by June 2010 is based on the current and forecast socio-economic situation
in the municipality: Current and relevant data; Data analysis reflecting type and level of economic activities in the
municipalities; Comparative and competitive advantages and socio-economic forecasts are explicitly articulated. The
Municipal LED strategy clearly outlines a strategy to address enterprise development and support. All LED objectives
are linked to LED identified priorities. Stakeholders (a level below the expected level of consultation) have been
involved in the development and implementation of LED strategy. The LED Plan and Strategy needs to be reviewed
especial with changing economy and demographics. Further required is the Rural Economic Development Strategy that
will feed into the LED strategy and Plan.
Resourceful partnerships established for LED activities
The LED terrain is in a constant state of flux and is still dogged by “conflicting” interpretations on its focus and
objectives.
This is mainly caused by the absence of a coherent policy framework and the inadequate clarity of
institutional mandates. This is further influenced by the evolutionary nature of LED practice, which requires the
maximisation of experiential sharing.
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Thus, it is important to create adequate space for introspection, learning and networking amongst practitioners to
ensure continuous effectiveness.
Kouga like all other municipalities is not immune from financial constraints that negatively impact on the realisation of
the desired LED Plan and Strategy. Kouga Budget is inadequate to attend to the primary LED objectives. Furthermore
the MIG funding provides for economic infrastructure projects and some few Socio-Economic projects. The Municipality
has partnership agreements with four (4) of the structures: Government Department; Private Sector (Business Sector);
International Organisations; Peer Municipalities; Communities.
Strategic Alignment with Cacadu District Municipality
Cacadu District Municipality has on 09 March 2012 been introduced a Learning Networking Draft Plan in the District
Support Team. This Strategic Plan seeks to enable a more sophisticated understanding of the LED function an effort
designed to improve understanding and immediately influence practice by creating space for learning and sharing of best
practice. Learning and Network is an enrichment mechanism for LED practitioners, through organised conference, study
tours workshops etc. The practitioners will be taught skills and insight in a friendly and casual atmosphere. The rationale
would be to enrich, expand upon, and allow for additional practice and experience with the concepts presented. This plan
will be effective hooked into other strategic support efforts, which include but are not limited to:
a)
Refinement of the existing generic DST operational framework
b)
Analysis of LED frameworks and policies.
c)
Already identified DST operationalisation actions i.e. CDM EIS, DST LED conceptual framework and NMMU LED
Consortium projects
d)
To synchronise this with other learning events, i.e. Thina Sinako learning encounters, DHLGTA‟s policy workshops e.g.
“Second Economy” workshops etc.
This is also part of a province wide effort, which is meant to consolidate an integrated, better-coordinated and more
effective local economic development (LED) support system. This is also represents a solemn attempt at affirming public
sector investment, intergovernmental relations and governance in the facilitation of LED. The PWG is represents a move
away from the often uncoordinated and sometimes ad hoc support by municipalities and sector departments to LED
initiatives. These are very important prescripts of the National LED Framework (2006).
A Cacadu District Municipality established a District Support Team (DST) which comprises the CDM‟s economic
development officials plus those of the nine Local Municipalities (LMs) and the ECPG sector departments. Within the
Cacadu District, internet enabled access to business intelligence would be very important in reducing business uncertainty,
for the following reasons:
Face to face business contact and interaction are complicated by small town rural nature of the District with very low
densities, long distances between towns, farms and tourism attractions and a transport network that is ever more
dispersed as one moves to the North away from the NMBM and the coastal corridor. The two main drivers of economic
activity are agriculture and tourism, both of which require high levels of connectivity with local and global markets and
have extensive business-to-business linkages across local and global value chains.
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The Business Intelligence is the process of collection, treatment and diffusion of information that has as an objective, the
reduction of uncertainty in the making of all strategic (business) decisions. The Business Intelligence has always been critical
to the functioning of any business, it is now more important than ever before for two main reasons:

An ever increasing amount of business involving every stage in the value chain is conducted over the web

The high level of information availability renders superior business intelligence to be an important competitive advantage.
Within South Africa, Local Economic Development or LED is a crucial tool and a legislated function of local government to
unlock local economic potential and redress the structurally skewed and inequitable economy that emerged from the
Apartheid Era. The institutional arrangement which is a key element of Economic Intelligence is that the District Support
Team (DST) of local LED officials must be the primary custodians and beneficiaries of the Cacadu Economic Intelligence
System (CEIS). The Draft Conceptual Framework for LED in the Cacadu District Identified„Three Sixty‟ Strategic Services
with a Model articulated as follows:

The ultimate goal of LED is social impact in the form of reduced poverty and improved quality of life, which is pursued by
means of improved economic performance, growth, employment and so forth.

To realise this improved economic performance, business sectors need to increase earnings for the local economy from
markets, by competing better.

These businesses benefit from competitive advantages and suffer the disadvantages of operating from this particular local
business environment.

LED improvement initiatives aim to improve the competitiveness of firms in the market and to reduce constraints in the
business environment.

These improvement initiatives require work / activity/ functions to be realised.

Stakeholders in collaboration provide the organisational capacity to execute and draw on available know-how and
resources.

3.
Achievement of the desired social impact justifies the investment of the resources into LED”
Institutional Commitment to Led
Council has for the past three years resolved to ensure institutional commitment to LED. The LED related IDP
priorities have been identified and an LED Plan drawn up and SMME strategy in place however with no secured funding.
The strength of LED unit is in Intergovernmental relationships & partnerships to increase the resource base, reviving
inter-departmental commitment, strategies and reporting on LED intervention. The plan does refer to the need of
policy formulation. A Major challenge relates to the lack of Trade and Investment Policy, Plan, Strategy, Marketing and
communication strategies as well capacity to review the existing LED Plan and SMME strategy that responds to the
current trends. Further a budget that is responsive to LED needs.
4.
Development Thrusts
A development thrust defines an area of priority focus. It is a collective economic force that can generate sufficient
economic energy and momentum to create a series of sustainable opportunities to achieve the set short, medium and
long-term objectives of any strategy.
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Based on the comprehensive strategic analysis and rigorous stakeholder consultative process, the Kouga Municipality and
its partners have identified the following five (5) key development thrusts as the core drivers of this LED strategy and
plan.
4.1.
Strategic Thrust [1]: Enterprise and Sector Development
Strategic goals:

To grow the numbers and improve the competitiveness and productivity of small, medium and micro enterprises;

To increase the numbers and productive capacity of SMME and large enterprises in tourism, agriculture and manufacturing
sectors of the economy;

To improve the quantity and quality of jobs created by SMME‟s and large enterprises;

To increase the contribution of tourism, agriculture and manufacturing on employment and gross geographic productivity.
Agriculture Development Framework:

To promote the production of high-value crops and vegetables

To attract new investments into agriculture and infrastructure development

To facilitate sustainable BEE enterprises in citrus, stock farming, fishing and maritime

To promote small-scale farming activities for food security net

To facilitate access to agricultural land by emerging farmers

To implement an agriculture enterprise development and extension programme

Coordinate agricultural activities by establishing an Agricultural Forum
Tourism Development Framework:

Facilitate establishment of new BEE enterprises in tourism

Design and implement tourism development programmes for local communities

Improve the quality of crafts and black-owned businesses in general

Establish community tourism forums to promote tourism participation

Facilitate the establishment of new tourism products within township areas
4.2. Strategic Thrust [2]: Economic Infrastructure Development
Strategic goals:

To improve the state and quality of general economic development infrastructure thus enhance the accessibility of
markets, movement of goods and services and inter-regional linkages.

To improve the levels of supply, quality and reliability of business support infrastructure in terms of provision of electricity,
water, sanitation, road, rail and harbour-linkages.

To attract new public and private investments to address critical bulk and economic, tourism and agricultural
infrastructural backlogs as a pre-condition to unlocking new economic growth levels.
4.3 Strategic Thrust [3]: Skills Development and Labour Alignment
Strategic goals:

To develop new management, technical and life-skills in line with labour market demands of the area, its key sectors and
the region at large;
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
To re-align skills production and capacity building programmes to meet existing labour market shortages through retraining and re-orientation;

To create surplus labour capacity to meet existing and future business and investment growth demands;

To improve the existing employability of the unemployed person including youth, women, under-graduates and postgraduates through targeted skills training.
4.4 Strategic Thrust [4]: Informal Economy Development
Strategic goals:

To encourage the participation of the previously disadvantaged communities and individuals in self-employment, self-help
and poverty-alleviation initiatives.

To provide meaningful support to informal self-employment, self-help and poverty alleviation initiatives thus ensuring
progressive growth into the SMME sector.

4.5
To enhance the role of the informal economy in meeting rural and township consumption / consumer needs.
Strategic Thrust [5]: Institutional Development
Strategic goals:

To build the appropriate internal [municipal] and to some extent, the external institutional capacity necessary to ensure
the successful implementation of the Council„s IDP economic objectives and this LED Strategy.

To improve the integration, alignment and coordination of government and stakeholder economic development
programmes to leverage resources.

5.
To establish meaningful communication, efficient decision-making and economic development and implementation capacity.
Kouga’s Development Approach to LED:
Development Priority
Desired outcomes
Broad Strategic Objectives
Improved local economy
Facilitate actions that improve service delivery in order to
To improve economic
that attracts tourism and
contribute to the reduction of poverty
growth, employment and
investment and provides
reduce poverty by
decent employment and
To facilitate the growth of the Kouga economy and increase
maximizing the socio-
sustainable livelihoods
employment opportunities by creating a conducive economic
economic impact of the
municipality‟s actions,
through broadening
stakeholder participation
in aligned and focused
environment
Support initiatives for agricultural development and related
processing activities
Facilitate actions that broaden Stakeholder participation in
economic activities
socio-economic activities.
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Strategic Framework for the LED Plan of the Kouga Local Municipality:
Intervention logic
Overall Goal
To improve economic
Objectively verifiable indicators
 Economic growth improved by at least % over a five-year
growth and employment
opportunities and reduce
poverty by maximizing the
socio-economic impact of the
municipality‟s actions,
period
 Employment is increased by % over a five -year period
 Poverty reduced by % over a five-year period
 % increase Stakeholder participation & % improved Service
through broadening
delivery
stakeholder participation in
aligned and focused socioeconomic activities.
Specific objective
Facilitate the growth of the
Kouga economy and increase
employment opportunities by
 % of investments increased
 % of procurement spend on local business
creating a conducive
 % of formal business retained and attracted
economic environment.
 Fully representative Local partnership established and joint
Facilitate actions that
broadening Stakeholder
participation in economic
action plans developed
 % of jobs created through municipal programmes
activities. Facilitate focussed
service delivery action
towards poverty reduction.
Result 1
Improve Economic

related to economic growth reviewed and improved
Governance capacity of the
municipality.
All Systems and procedures within the municipality

Institutional Mechanism created that involves all
stakeholders in decisions around economic issues

Resources (financial and human) available for Local
Economic Development Unit increased by % for the next
3 year
Result 2
Facilitate the development,
attraction, expansion and
retention of Enterprises
 Involvement of all relevant stakeholders in actions around
SMME development.
 % increase of local businesses in procurement of services
for municipality
 Capacity building programmes for entrepreneurs and
business development services available
 At least two linkage programmes between 1st economy and
2nd economy role players facilitated
 At least % increase in new businesses setting up.
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Result 3
Locality of the municipality is
 Municipality is aware of all resources and assets in its
developed in an integrated
and sustainable way
position.
 The general Capacity for understanding sustainable
development and conservation improved by %
 Existing competitive infrastructure and resources maintained
and improved
Result 4
Municipal actions are aligned
and inclusive so that
livelihoods of ordinary people
 % of communities used in municipal service delivery
 % businesses involved in community development issues
in the municipality are
improved.
Result 5
The capacity and needs of the
 Understanding of the labour-force needs and skills of
Labour Force in the
business in the municipality.
municipality understood and
recorded
 At least three skills training programme for Labour Force
run
Overall Activities
Result 1
Economic Governance capacity of the municipality improved.
1.1
Establish an interdepartmental working group to deal with all integrated LED issues.
1.2
Establish a Local Action Group consisting of government, the private sector and the
community sector.
Result 2
1.3
Joint plans with all stakeholders are developed
1.4
Implementation of internal and external awareness campaigns.
1.5
Resourcing the LED unit with financial, human and skills capacity.
1.6
Improve the processes and procedures of the different units within the municipality
1.7
Business red tape reduction
Development, expansion and retention of Enterprises are facilitated.
2.1
Promotion of investment through developing trade & investment strategy and extensive
marketing campaign around the comparative advantage and competitiveness of the
municipality
2.2
Improve the internal procurement systems the municipality so that it benefit local
businesses
2.3
Support the linkage between 1st & 2nd Economy players
2.4
Strengthen the relationship between institutions supporting enterprises and the
municipality
2.5
Developed a set of actions (including non-financial incentives) that retains enterprises in
the locality.
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Result 3
Locality of the municipality is developed in an integrated and sustainable way.
3.1
Cadastral study of Kouga finalised
3.2
General marketing of the locality including the heritage sites
3.3
Identify true comparative advantage of the locality and use it to make locality competitive
3.4
Development of a specific programme around sustainable development and
Conservation
3.5
Result 4
Explored strategic LED opportunities of “Blue-Flag Beach”
Municipal actions are aligned and inclusive so that livelihoods of ordinary people in
the municipality are improved.
4.1
Review how economic opportunities can be utilised in the waste management cycle and
exploit opportunities.
4.2
Developed specific activities around Policing, car-guards, street kids etc.
4.3
Involving businesses in programmes of Health awareness inside and outside the business
environment
Result 5
Labour Force capacity and needs understood and recorded
5.1
Do a labour-force survey within the municipality to determine the job needs of the
locality.
5.2
Develop a data-base of general jobs available in the municipality.
5.3
Facilitate skills development programmes for the labour-force in the locality.
5.4
Ensure the support for labour intensive projects
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